Bangkok, Oct 22 – Commercial banks have started to reduce lending rates, sending the easing of financial costs to the lending market. Kasikorn Research Center expects business costs to decrease by 1.3 billion baht this year. This year’s lending growth rate may not exceed 1.5%.
The Kasikorn Research Center reported that approximately 1 week after the Monetary Policy Committee (MPC) resolved to reduce the policy interest rate on October 16, 2024, many commercial banks have announced a reduction in lending rates by up to 0.25%, effective from early November 2024. The Kasikorn Research Center believes that the gradual reduction in lending rates by commercial banks this time is one of the mechanisms to pass on the easing of financial costs in line with the policy interest rate to the loan market. It is expected that the proportion of retail loans and business loans that are likely to benefit from the reduction in lending rates before the end of 2024 will be approximately 40.9% of the total loans in the Thai banki
ng system. Meanwhile, the result of this round of one-way interest rate reduction will reduce the interest burden of retail and business debtors by almost 1,300 million baht (the result of the interest burden that will be reduced only during November-December 2024). However, this interest rate reduction may not result in a change in the monthly installments of debtors, but debtors will benefit in the form of closing that debt contract faster.
For the overall picture of 2024, Kasikorn Research Center sees that the growth rate of the Thai banking system’s loans may close in 2024 at no more than 1.5% because the financial cost that has started to decrease in line with the policy interest rate is only one factor affecting the disbursement of loans. At the same time, it is estimated that both retail borrowers and the business sector will consider other environmental factors, especially the situation and trends of the Thai economy in the future, which will affect investment plans, consumption, and future debt repa
yment capabilities, before disbursing loans as well. -511- Thai News Agency
Source: Thai News Agencyl